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Chia-hui Lu
''Labor participation externalities and unemployment''
( 2020, Vol. 40 No.2 )
Introducing labor participation externalities into a standard search model, this paper investigates the impact of such externalities and the reform of unemployment compensation on macroeconomic performance. This paper finds that keeping up with the Joneses behavior on labor participation accompanying the reduction in unemployment benefits can decrease the unemployment rate and increase the labor participation rate.
Keywords: Keeping up with the Joneses, unemployment, search and matching
JEL: E2 - Macroeconomics: Consumption, Saving, Production, Employment, and Investment: General (includes Measurement and Data)
J6 - Mobility, Unemployment, and Vacancies: General
Manuscript Received : Oct 13 2019 Manuscript Accepted : Apr 15 2020

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